Lax oversight helped embezzler steal, state Democratic records show

The embezzlement of up to $330,000 in campaign donations by former Democratic political operative Michael King was abetted by a lax system of controls that allowed his deceit to go undetected for many months, newly released records show.

As executive director of the state Senate Democratic Campaign Committee (SDCC), King was allowed to write himself checks for bogus expenses without submitting receipts, according to investigative records released to The Seattle Times by the King County Prosecutor’s Office after a public-disclosure request.

The records, including a transcript of King’s confession to prosecutors, chronicle his personal decline as he began his days pouring whiskey in his coffee and ended them at a Shoreline casino, gambling away his family’s bank account and draining the SDCC’s coffers.

King’s thefts have become an issue in the Seattle mayoral race because state Sen. Ed Murray was a co-chair of the campaign committee for much of last year.

Mayor Mike McGinn has held up the SDCC embezzlement as a failure of Murray’s leadership; Murray has responded that he was not responsible for detailed monitoring of the group’s spending.

The records released by the prosecutor’s office contain no damning new revelations about Murray’s role at the committee.

But in his June 5 interview with prosecutors, King did confirm a general lack of financial scrutiny by the legislators who served as SDCC co-chairs. The committee recruits candidates and raises money to elect Democrats to the state Senate.

Murray became a co-chair last June. Among the previous co-chairs, state Sen. Scott White died unexpectedly of a heart condition, state Sen. Lisa Brown declined to seek re-election and state Sen. Derek Kilmer was elected to Congress.

King’s embezzlement started in late 2011 under their watch. King said he had “very few conversations” with the senators about the day-to-day operations of the committee.

That didn’t change when Murray and state Sens. Sharon Nelson and David Frockt took over as co-chairs last year. “There was never any increased accountability really,” King told investigators.

However, King said the senators were never told he’d been granted the authority to write checks from the SDCC accounts without a second signature — a power that emboldened his thefts.

A trusted employee

King had worked in state Democratic circles since 2004 and was trusted by his bosses and co-workers. In his interview with investigators, King took full responsibility.

“I did some things that I deeply regret — and — and I want to do everything I can to make it right,” he said.

King, 32, pleaded guilty to eight theft counts this month and faces a recommended sentence of two years in prison when he is sentenced Nov. 22. At the time of his confession he was staying in a sober-living house and bussing tables at a Ballard restaurant — a major fall from the $78,000 job he held at the SDCC.

His embezzlement hurt Democrats in the 2012 elections by siphoning money that could have been spent on a key state Senate race in southwestern Washington that a Democrat lost by just 74 votes. That allowed a Republican-dominated coalition to seize control of the state Senate this year.

The finger-pointing as a result of the case at times pitted Murray and other SDCC leaders against Jason Bennett, the former treasurer of the group. But King said he didn’t blame Bennett, a personal friend, for failing to spot his crimes. “I violated his trust. I think he fully trusted me,” he said.

It was Bennett who alerted Murray to King’s thefts after he learned of them in February.

A transcript of Bennett’s own interview with prosecutors showed some of that tension. “I’m willing to help in any way,” Bennett said, but added he wasn’t happy with “the blame game that’s going on around this.”

Noting how closely prosecutors had worked with the SDCC on the case (a committee attorney participated in the prosecutor’s interview with King), Bennett said the Democratic leaders were trying “to inoculate the mayoral candidate.”

But in an interview Tuesday, Bennett wanted to put aside any tensions, saying the case “isn’t a reflection on Ed’s leadership, it’s not a reflection on my abilities as a treasurer.”

Inventing expenses

King’s own confession showed he’d bilked his employers primarily by making up and padding expenses for polling through online outfits like Survey Monkey and Precision Polling. “Virtually all of those are not legitimate reimbursements,” King told prosecutors.

King said he sometimes took SDCC checks and cashed them at a bank near Goldie’s Shoreline Casino, where he lost most of his personal money, hiding his problems from his wife.

King was arrested for alleged drunken driving in August 2012, records show. The case was pleaded down to reckless driving. He used SDCC money to pay his lawyer.

By late 2012, King was spiraling out of control. He’d avoid colleagues and say he had afternoon meetings but go off to drink and gamble. He told his wife he had more meetings in the evening but would drive three blocks around the corner to drink at a bar. He claimed he had the flu and stayed home on a four-day bender.

“I would go to a casino, sit down, lose $2,000. Walk out to my car thinking to myself, ‘That’s it, I’m never going back in again,’ and five minutes later I’d be sitting back at the table with a fresh drink and you know, more money in front of me,” King told prosecutors.

By early 2013, the SDCC bank accounts were suspiciously low, and Bennett started to question why King was so frequently absent.

In early February, King downed three bottles of shabby white wine, went to the casino to drink more and realized he’d hit bottom.

He got on a plane to visit his parents and confess his sins. He texted an SDCC co-worker to tell her she’d have to take over for a while.

“I did things … horrible things,” he wrote. “I’m a sick guy. I want to get better. But things are probably going to be getting a lot worse in the short term.”